Career CFO vents her frustration over business, human capital, economics, social environment, culture, politics, and everything else; but always with a monetary twist

November 2010 posts

November 30, 2010

One of my former CEO's contacted me after reading my post on Bill of Rights in Small Business Environment (who knew they would be looking?). He's been in business for 27 years with many employees passing through. Listening to his opinion on the Freedom of Speech, I came to realize that his point of view might be typical for a lot of business owners and should be shared here.

According to him, employees, including his current CFO, choose not to voice their opinions as a manifestation of a passive-aggressive attitude. In reality, he says, he would not mind listening to what they have to say on variety of business issues.

My first impulse was to laugh. I used to work for this person and, to put it mildly, he is not the friendliest of bosses. My policy, nevertheless, was always to express my judgement on all professional issues. This, I must say, received mixed reaction, depending on whether my opinion was in agreement with his or not. It was fortunate that our commercial views were nearly identical and we rarely had disagreements. However, on those occasions when my opinion differed, what I got back was the cold silent stare that could have discouraged someone less straightforward.

But I didn't laugh, because I wanted to know more about the reasons he has classified his new CFO as passive-aggressive. So, I asked more questions. Actually, this was not the first time I asked these questions. Over the years more than a few senior execs have used that term to describe some of their employees to me. It always puzzled me how these business people recognized a behavioral (i.e. psychological) trait.

Let me tell you, most of the time, including in case of the CFO in question, it amounts to "sulking." Instead of speaking out, the employee shows a "bad temper": he is morose, with disappointment and annoyance written all over his face. In other words, unreleased frustration (my favorite subject), jumps from inside onto his face. And yes, that can be classified as a passive expression of aggression.

Yet, at the same time the CFO still works hard, diligently performing all his duties and making sure that the business continues to survive and prosper. And that's actually the opposite of passivity.

Sulking on its own is not a sufficient symptom to diagnose someone as passive-aggressive. There are far more significant and damaging, especially in business environment, manifestations: procrastination, obstructionism, chronic tardiness, tendency to blame others for one's own failures, making excuses for non-performance, deliberate creation of chaotic situations.

If you keep catching your employee shuffling papers on his desk every time you walk by, or even if he appears to be busy but never delivers any results; when a deadline of a project gets pushed further and further back, then you may have a passive-aggressive person in front of you.

However, if the employee does his best, but looks upset, maybe you should just let him exercise his constitutional freedom to speak his mind.

November 26, 2010

The media, politicians and economists are trying to convince everyone that recession has ended many months ago. Well, good for recession, but from what I observe, a lot of folks are out of work. There have to be a reason why unemployment benefits are extended up to 72 weeks in most states.

Let's face it, the "employment gaps" are far longer now than they have been in many years. It is especially true for CFO's and Controllers whose small and mid-size employers went out of business or contracted to the level of not being able to afford senior management. Even though I never believed the old recruitment fable that every $10K of your desired compensation translates into one month of job hunting, the basic rules of statistics prove that it takes longer to find a high level position simply because there are less of them. Now the available openings are further reduced by the economic contraction. There are government aid packages designed specifically to stimulate hiring by small businesses, but it will take long time before we will see significant impact.

Knowing all that, nevertheless, does not prevent recruiters and HR managers from asking you point blank, "Why you have been out of work for such a long time?" They know why. They ask because they want to see how you handle the question. Your ability to present yourself in the best light during an interview and explain the employment gap on your resume in the most appealing way is a very sensitive issue.

I don't always agree with their material, but what I like about The Ladders' advice pieces is that they give us the point of view of the hiring professionals, the very people on the other side of the table. Those on the job market need to cater to their expectations and their mind-set. This particular article has the most straight-forward advice on the employment gap issue I have ever seen.

I have to say, however, that almost until the end they got me worried because it seemed that the article practically recommended to make up a story to fill the gap: say whatever, except that you were just looking for a job. Only in the last paragraph the actual activities are implied.

And I would like to elaborate on that. Please, don't make up stories - you never know where that may lead you. Nobody looks for a job for 12 hours every day. So, use your spare time to occupy yourself with one of those recommended activities, and then you can tell people about them. Even if you buy a SOX manual and study it on your own, you can say that you have significantly expanded your internal control compliance horizons.

November 24, 2010

The "Hands-Off Micromanagement" style so prominent in many business owners and defined by me in my September 21, 2010 Post has a lot of implications in daily lives of CFO's and Controllers. One of the most frustrating facets has to do with petty mistrust.

I've got volumes of stories illustrating this particular trait of a CFO vs Owner relationship. Here is a compiled rendition of a rather frequently recurring Tale of Mistrust from the CFO Folklore.

AlphaOmega Inc. is a treasury-intense company and its CFO devotes big chunk of his time managing it. He personally decides on daily basis whether the company needs to borrow to cover operational deficit or invest the excess of available funds. He is singly responsible for signing financial instruments, including multimillion-dollar letters of credits and commercial loans paid directly to suppliers. He electronically hedges foreign currencies, sometimes as much as $1 million per transaction. His discounting customers' trade documents on London Forfeiting Market frequently reaches $20 million per tranche.

Carrying all these monetary responsibilities makes him especially meticulous about the separation of duties and internal controls. None of the transactions he personally conducts are recorded by him. He deliberately never cuts any checks. He has a designated treasury operator setting up all the wire transfers. The companies books and records are regularly audited by lenders. And his quarterly and annual accounting audits are always clean and produce unqualified opinions.

And yet... he has no authority to sign a $1 check or execute a $10 wire transfer release. Only the Boss can do that.

And this Boss is not available for you whenever you need him: the business frequently takes him abroad; May through September he is in his summer house; he has to spend holidays with his kids; and he has a girlfriend (you know, afternoon delight and all that).

Moreover, he hates signing checks and keeps ignoring that thick folder the AP manager put into his in-box two days ago. And every time the CFO sends a "pleeeease-release-wires" email, the Boss acts like he is asked to grant a personal favor. And it is the CFO who has to deal with the frustration of vendors and suppliers waiting for their payments.

The situation drives him crazy and causes perpetual frustration and anxiety. Swallowing his pride and ignoring the insulting pettiness of such mistrust, the CFO addressed the issue many times, sticking strictly to the damage the situation causes the business. He explained on numerous occasions that the way his internal controls are set up, it would require his entire stuff to be part of a scheme to steal even a dollar from the company. He also explained that their treasury systems allow to set up limits of execution authority and that the Boss shouldn't be bothered with $2,000 wire transfers.

All falls on deaf ears. So, the poor CFO still chases his boss somewhere in Hong Kong, begging him to release today's wires before the banks' cutoff time of 5 pm EST, which is 6 AM tomorrow over there.

Here is an illustration to the last post's discussion on Bill of Rights in the workplace environment. It would be humorous if it wasn't so sad. The split between what goes inside us and what we must show on the surface is one of the major causes of frustration and anxiety. It is probably the most difficult aspect of having a successful career as CFO's, CAO's, Controllers, etc. In reality, it is true for all C-level employees, especially in small and mid-size privately-held businesses.

November 18, 2010

Regardless of your position - CFO, Controller, operational staff, CSR, janitor -when you accept "employment at will" arrangement in a privately-held company, you inadvertently give up the majority of your rights granted to you by the US Constitution. Since the Bill of Rights is automatically presumed, it is not necessary to include freedom clauses into Employee Handbooks, Rules of Conduct and other such documents. Look through them again whenever you have a chance: they primarily describe what the company expects of you, not the other way around.

Closely-held companies are not democracies. They are owners' kingdoms, absolute monarchies. And most of the time there is nothing you can do about it. Let us look at some of the Amendments.

1. Free Exercise. Having been always based in NYC precluded me from ever witnessing open discrimination of employees for their religious believes. At the same time on many occasions I've observed explicitly expressed irritation about people's taking their PTO to celebrate religious holidays. Quite a few times I saw the candidates being rejected based on the unspoken possibility of their observance.

2. We do not have Freedom of Speech as employees. We try to keep our political, social and cultural opinions to ourselves if we know they contradict those of our bosses. Frequently we are not even given an opportunity to retort abusive, accusatory, or unfair verbiage directed at us or at our subordinates.

3. We cannot exercise Right to Assembly. I myself as a supervisor is pretty strict about people congregating for reasons not related to their jobs during work hours. At the same time I am not as obsessive about it as some business-owners who throw tantrums every time they see people talking.

4. The Protection from Unreasonable Search is violated time and again in the workplace. The business files, emails, etc. are rightfully belong to the company you work for, and if you are openly asked to follow established policies of information sharing, files locations and full disclosure, you should willingly comply. But many employers use System Administrators to secretly look through their employees' emails, files, etc. They open doors with spare keys and look into draws containing personal affects. They use special programs to record IM communications, etc, etc.

5. Not a single right guaranteed by the Fifth Amendment (due process, double jeopardy, self-incrimination) is considered when you are judged, persecuted and punished by your boss. Fairness is laughed at in business environment. A lot of CEO's, with whom I dealt over the years either as an employee or through business and social networking, considered my personal determination to be as fair as possible and judge people on their merits in all situations as one of my "strange" qualities.

One right we, as employees, can enjoy under "employment at will" arrangement is the very special freedom it guarantees you: just as your employer can fire you without warning, you can quit on a moment's notice. That, of course, if you can afford to do so.

November 10, 2010

I highly recommend this yesterday's post from HR Capitalist. His behavioral insights are applicable to everyone in a senior management position, including all CFOs, Controllers and other financial professionals.

November 09, 2010

They say that the first impression is the most lasting one. And it is true even for those people who try very hard to be fair and give people a chance to show their true qualities.

I myself is one of those people who make themselves look past the appearance of a job applicant. Few years ago I have interviewed a woman who was grossly obese and needed a cane to assist her in moving her body. I knew right away that aside from possible health issues, there could be multitude of other problems: we would need to order her a special X-large chair, my CEO may not like someone like that to be prominently installed in the Operations Department, visiting business relations may be destructed by the sight, etc. etc.

Nevertheless, I gave her a full interview, which she passed with flying colors, and ended up hiring her. It never even occurred to me not to offer her the salary attached to the position. She got paid the same wages anyone in her place would.

Weight issue aside, my opinion is that when it comes to hiring process the entire "first impression" concept is very unprofessional. Time after time, hiring execs, recruiters and variety of HR professionals yield to their contrived, closed-minded, self-centered views of other people instead of thinking of what's best for their companies.

Two weeks ago my good friend MJZ, also a career CFO, went for a job interview to a company that provides services to children with learning disabilities and autism under the contracts with various government health agencies. Since such programs usually become first victims of states and counties budget cuts, the company desperately needs someone who can strategize their way into more diversified revenue models. MJZ has a vast experience of building such strategies and facilitating companies' growth.

She has previously had a phone interview and communications with the CEO's personal assistant. So when in-person interview invitation was received, she assumed it would be with the CEO herself. However, she was interviewed by a middle-rank HR Manager.

When she told me that she did not even make it to the next round - the actual interview with the CEO (the HR Manager sent her an email), I've asked for the entire meeting description. Now, knowing all details, I am confident that the HR Manager's rejection had nothing to do with MJZ's professional qualifications. It had to do with the fact that she was dressed for an interview with the CEO and instead was assessed by a sweater-and-tights-clad middle-manager.

The sad result is that the company had missed an opportunity to hire somebody who could have brought them to the next level of development. Their loss, of course, but nevertheless a disappointing experience for my friend.

November 05, 2010

It happens very rarely, but this time I am in absolute agreement with yet another installment from "You Are Better Than Your Job Search" - previously referenced book from The Ladders' CEO Marc Cenedella: Title vs. Salary. And I strongly advise everyone to click on the link and read the excerpt very carefully.

It is true that a good title looks pretty on our resumes, but it cannot be at the center of your decision to accept a job offer. If the title comes as a part of a good deal completed with new professional challenges and attractive compensation package, then great, you are doing the right thing by taking the job. However, if its just a title and everything about the job makes you unhappy, depressed and economically strapped, there is no point in making such sacrifices.

And you cannot fool anybody with that line on your resume either. All experienced recruiters and the majority of hiring execs know that if you held the Controller position in a $10 million a year, known to nobody company, it means you had no staff, can claim no sophisticated accomplishments, nobody asked your strategic advice and your salary was around $80K. At best, you were a glorified full-charge bookkeeper.

As the matter of fact, I frequently say that I don't care about my title. As far as I am concerned, they can call me "hey you," or a "firefighter," or a "cleaning lady" on the organizational chart as long as I can continue impact the business in the most profound way, implement ideas of highest sophistication, keep all functions in full control and receive compensation that reflects my influence on the company.

Another very valuable point concerning inflated titles brought up in the article/excerpt is the artificial promotion. In the companies with flat management structure, people keep carrying out the same responsibilities year after year with minimal salary increases and title changes that reflect not a professional growth but rather simple seniority. After 10 or 15 years with the same company a person who started as a catch-all office girl becomes the Controller. And it is fine if she actually grew into the Controller's responsibilities together with the company's development (this is what I call an "in-the-chair" career ladder), but most of the time that is not the case. Hence, taking the Controller's job replacing that person would not be a great professional achievement.

Of course, when we are stuck in the rut of a long job search, we become desperate and dispirited. Then even an inflated title may seem like a sweetener of whatever position we are ready to grab to "put the food on the table." However, desperation is a poor adviser. Please, think long and hard before you take that step.